Reinstating US GSP

No clear indication is there about progress in the matter of restoration of the US generalised system of preferences (GSP). The duty-free preferential scheme, suspended more than six months ago following two major factory disasters in Savar, triggered uncertainties that many thought would be over in view of the activities undertaken by the government in keeping with the work plan of the office of the USTR (United States Trade Representative). But things have not moved as expected. Although suspension of US GSP has not affected Bangladesh's exports because of poor product coverage of the scheme that excludes most major items including garments, the critical need to reinstate the benefit lies obviously in snuffing off the negatives brewing over the country's labour rights and workplace conditions.

There are speculations that the Obama administration is taking time to watch the nature and direction of political unrest that crippled almost all sectors of the country for well over two months. However, keeping in view the works initiated for implementation of the USTR's work plan, it was expected that the process for considering the withdrawal might start in December through a hearing. In anticipation, the ministry of commerce (MoC) had sent its report to the USTR in November last year. News reports, quoting official sources, say that the USTR may hold the hearing in April this year. It has been stated that the report of the MoC on progress of work and future roadmap has been sent to the USTR via the ministry of foreign affairs (MoFA) on November 15. The report incorporates Bangladesh's response and on-going course of action concerning compliance with 16 conditions set out by the USTR. As the hearing did not take place as scheduled in December, the government, sources say, sent another report on December 23, providing the latest updates on the implementation position of the work plan.

It may be recalled that the US, under a presidential proclamation on June 27, 2013, suspended Bangladesh's eligibility for tariff benefits under its GSP scheme. The decision, though strongly worded, provided for initiating discussions with the government of Bangladesh about steps to improve, among others, worker's rights situation so that GSP benefits could be restored and factory tragedies prevented. No worthwhile progress has so far taken place. In the meanwhile, Bangladesh attended a USTR hearing in March 2013, and some actions have been in place and some being planned for compliance with the USTR's work plan.

Of the works being contemplated towards compliance with the work plan include formation of 30 teams under the supervision of the Bangladesh University of Engineering and Technology (BUET) to inspect 1500 factories as a starter, recruitment of factory inspectors etc. Observers are of the opinion that one of the reasons in delaying the hearing could be that the USTR is more eager to see visible progress rather than a roadmap. In that case, the onus is squarely on the government of Bangladesh to show the activities it has initiated so far and the level of progress achieved. The Labour Act-2013 with its alleged constraints to bring into play meaningful results to address labour matters including collective bargain for wage-raise could also figure as not satisfying enough to consider the withdrawal of GSP suspension. The government and other stakeholders should be well aware where the shoe actually pinches.